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Fed Chair Powell to deliver Jackson Hole address at 1400

GMT

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Markets put chance of Fed rate cut next month at 71%

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Dollar gains as traders rethink rate cut bets

(Updates prices, reworks for EMEA mid-session trading)

By Ishaan Arora

Aug 22 (Reuters) - Gold slipped on Friday due to a

firmer dollar, with markets awaiting U.S. Federal Reserve Chair

Jerome Powell's speech at the annual Jackson Hole symposium for

more insight on the Fed's monetary policy path.

Spot gold was down 0.2% at $3,330.70 per ounce by

1058 GMT, while U.S. gold futures for December delivery

were 0.4% lower at $3,372.70.

The dollar index rose to a near two-week high, making

gold more expensive for overseas buyers, as investors pared back

expectations for a Fed rate cut in September.

UBS analyst Giovanni Staunovo said the moderately

stronger dollar was playing an important role in gold's dip

today, while Fed officials' comments pointed to the next FOMC

meeting "being an intense one, with some favouring large cuts,

while others (favour) no move at all."

Fed officials on Thursday appeared lukewarm to the idea

of a rate cut next month as investors geared up for Powell's

speech, due at 1400 GMT on Friday.

Futures markets indicate a 71% chance of a quarter-point

rate cut next month, according to CME's FedWatch tool.

Non-yielding bullion tends to do well in a low interest rate

environment.

"The cut is priced in, but Powell will keep all options

on the table and not commit to any decision," Staunovo added,

"There is a lot of data between now and the next Fed meeting and

clarity on potential revisions when the BLS is reviewing

historical data is also needed."

Recent labour market data showed U.S. jobless claims rose

last week by the most in nearly three months, while unemployment

claims the previous week hit a near four-year high.

The challenge for Fed policymakers is that even though there

are signs of labour market weakening, inflation remains above

the central bank's 2% target and could go higher due to the

Trump administration's aggressive tariff hikes.

Elsewhere, spot silver was down 0.4% at $38 per

ounce, platinum fell 1.3% to $1,335.31, and palladium

fell 0.2% to $1,108.59.